The Almighty Fed?

This blog has been mostly devoted to monetary policy and the actions of the Federal Reserve Board and US Treasury. The questionable logic of this is alluded to in this quote from John Mauldin's investment newsletter:

“Why is it that we believe 12 human beings can sit around a table and decide the price of the most important commodity in the world—interest rates on the world's global reserve currency. The market is perfectly capable of setting that rate on its own. It is the hubris of man, and especially Keynesian Man and their offspring, who think the economy needs managing by wise and thoughtful people and not the mere hoi polloi. It’s the whole elite thing I write about. I mean, these are trained economists with literally a battalion of even more trained economists at their beck and call, so surely we should trust their judgment. I mean, look at their track record (note sarcasm—it is not called the dismal science for no reason).

…

“This is damn serious business. I get that the free market can create volatility. But the regulated market can create stagflation and worse outcomes, not to mention cronyism and the unintended consequences of rates that are set too low. Living in the real world, we are forced to live with 12 people setting the price of money. We have to deal with that reality.”

And it's not all the Fed's fault, as monetary policy is held hostage fiscal policy and politics. This is just one more catastrophic failure of the technocratic governance model espoused by politicians and bureaucrats everywhere.